Druid perspectives on nature, culture, and the future of industrial society

Wednesday, May 12, 2010

After Money

The discussion of the risks of complexity in the last few posts here on The Archdruid Report dealt in large part with abstract concepts, though the news headlines did me the favor of providing some very good examples of those concepts in action. Still, it’s time to review some of the practical implications of the ideas presented here, and in the process, begin wrapping up the discussion of economics that has been central to this blog’s project over the last year and a half.

The news headlines once again have something to contribute. I think most of my readers will be aware that the economic troubles afflicting Europe came within an ace of causing a major financial meltdown last week. The EU, with billions in backing from major central banks around the globe, managed to stave off collapse for now, but it’s important to realize that the rescue package so hastily cobbled together will actually make things worse in the not-very-long run. Like the rest of the industrial world, the EU is drowning in excess debt; the response of the EU’s leadership is to issue even more debt, so they can prop up one round of unpayable debts with another. They’re in good company; Japan has been doing this continuously since its 1990 stock market and real estate collapse, and the US has responded to its current economic nosedive in exactly the same way.

It’s harsh but not, I think, unfair to characterize this strategy as trying to put out a house fire by throwing buckets of gasoline onto the blaze. Still, a complex history and an even more complex set of misunderstandings feeds this particular folly. Nobody in Europe has forgotten what happened the last time a major depression was allowed to run its course unchecked by government manipulation, and every European nation has its neofascist fringe parties who are eager to play their assigned roles in a remake of that ghastly drama. That’s the subtext behind the EU-wide effort to talk tough about austerity while doing as little as possible to make it happen, and the even wider effort to game the global financial system so that Europe and America can continue to consume more than they produce, and spend more than they take in, for at least a little longer.

There was a time, to be sure, when this wasn’t as daft an idea as it has now become. During the 350 years of the industrial age, a good fraction of Europe did consume more than it produced, by the simple expedient of owning most of the rest of the world and exploiting it for their own economic benefit. As late as 1914, the vast majority of the world’s land surface was either ruled directly from a European capital, occupied by people of European descent, or dominated by European powers through some form of radically unequal treaty relationship. The accelerating drawdown of fossil fuels throughout that era shifted the process into overdrive, allowing the minority of the Earth’s population who lived in Europe or the more privileged nations of the European diaspora – the United States first among them – not only to adopt what were, by the standards of all other human societies, extravagantly lavish lifestyles, but to be able to expect that those lifestyles would become even more lavish in the future.

I don’t think more than a tiny fraction of the people of the industrial world has yet begun to deal with the hard fact that those days are over. European domination of the globe came apart explosively in the four brutal decades between 1914, when the First World War broke out, and 1954, when the fall of French Indochina put a period on the age of European empire. The United States, which inherited what was left of Europe’s imperial role, never achieved the level of global dominance that European nations took for granted until 1914 – compare the British Empire, which directly ruled a quarter of the Earth’s land surface, with the hole-and-corner arrangements that allow America to maintain garrisons in other people’s countries around the world. Now the second and arguably more important source of Euro-American wealth and power – the exploitation of half a billion years of prehistoric sunlight in the form of fossil fuels – has peaked and entered on its own decline, with consequences that bid fair to be at least as drastic as those that followed the shattering of the Pax Europa in 1914.

To make sense of all this, it’s important to recall a distinction made here several times in the past, between the primary, secondary, and tertiary economies. The primary economy is the natural world, which produces around 3/4 of all economic value used by human beings. The secondary economy is the production of goods and services from natural resources by human labor. The tertiary economy is the production and exchange of money – a term that includes everything that has value only because it can be exchanged for the products of the primary and secondary economies, and thus embraces everything from gold coins to the most vaporous products of today’s financial engineering.

The big question of conventional economics is the fit between the secondary and tertiary economies. It’s not at all hard for these to get out of step with each other, and the resulting mismatch can cause serious problems. When there’s more money in circulation than there are goods and services for the money to buy, you get inflation; when the mismatch goes the other way, you get deflation; when the mechanisms that provide credit to business enterprises gum up, for any number of reasons, you get a credit crunch and recession, and so on. In extreme cases, which used to happen fairly often until the aftermath of the Great Depression pointed out what the cost could be, several of these mismatches could hit at once, leaving both the secondary and tertiary economies crippled for years at a time.

This is the sort of thing that conventional economic policy is meant to confront, by fiddling with the tertiary economy to bring it back into balance with the secondary economy. The reason why the industrial world hasn’t had a really major depression since the end of the 1930s, in turn, is that the methods cobbled together by governments to fiddle with the tertiary economy work tolerably well. It’s become popular in recent years to insist that the unfettered free market is uniquely able to manage economic affairs in the best possible way, but such claims fly in the face of all the evidence of history; the late 19th century, for example, when the free market was as unfettered as it’s possible for a market to get, saw catastrophic booms and busts sweep through the industrial world with brutal regularity, causing massive disruption to economies around the world. Those who think this is a better state of affairs than the muted ebbs and flows of the second half of the twentieth century should try living in a Depression-era tarpaper shack on a dollar a day for a week or two.

The problem we face now is that the arrangements evolved over the last century or so only address the relationship between the secondary and tertiary economies. The primary economy of nature, the base of the entire structure, is ignored by most contemporary economics, and has essentially no place in the economic policy of today’s industrial nations. The assumption hardwired into nearly all modern thought is that the economic contributions of the primary economy will always be there so long as the secondary and tertiary economy are working as they should. This may just be the Achilles’ heel of the entire structure, because it means that mismatches between the primary economy and the other two economies not only won’t be addressed – they won’t even be noticed.

This, I suspect, is what underlies the rising curve of economic volatility of the last decade or so: we have reached the point where the primary economy of nature will no longer support the standards of living most people in the industrial world expect. Our politicians and economists are trying to deal with the resulting crises as though they were purely a product of mismatches between the secondary and tertiary economies. Since such measures don’t address the real driving forces behind the crises, they fail, or at best stave off trouble for a short time, at the expense of making it worse later on.

The signals warning us that we have overshot the capacity of the primary economy are all around us. The peaking of world conventional oil production in 2005 is only one of these. The dieoff of honeybees is another, on a different scale; whatever its cause, it serves notice that something has gone very wrong with one of the natural systems on which human production of goods and services depends. There are many others. It’s easy to dismiss any of them individually as irrelevancies, but every one of them has an economic cost, and every one of them serves notice that the natural systems that make human economic activity possible are cracking under the strain we’ve placed on them.

That prospect is daunting enough. There’s another side to our predicament, though, because the only tools governments have available these days to deal with economic trouble are ways of fiddling with the tertiary economy. When those tools don’t work – and these days, increasingly, they don’t – the only option policy makers can think of is to do more of the same, following what’s been called the “lottle” principle – “if a little doesn’t work, maybe a lot’ll do the trick.” The insidious result is that the tertiary economy of money is moving ever further out of step with the secondary economy of goods and services, yielding a second helping of economic trouble on top of the one already dished out by the damaged primary economy. Flooding the markets with cheap credit may be a workable strategy when a credit crunch has hamstrung the secondary economy; when what’s hitting the secondary economy is the unrecognized costs of ecological overshoot, though, flooding the markets with cheap credit simply accelerates economic imbalances that are already battering economies around the world.

One interesting feature of this sort of two-sided crisis is that it’s not a unique experience. Most of the past civilizations that overshot the ecological systems that supported them, and crashed to ruin as a result, backed themselves into a similar corner. I’ve mentioned here several times the way that the classic Lowland Maya tried to respond to the failure of their agricultural system by accelerating the building programs central to their religious and political lives. Their pyramids of stone served the same purpose as our pyramids of debt: they systematized the distribution of labor and material wealth in a way that supported the social structure of the Lowland Mayan city-states and the ahauob or “divine kings” who ruled them. Yet building more pyramids was not an effective response to topsoil loss; in fact, it worsened the situation considerably by using up labor that might have gone into alternative means of food production.

An even better example, because a closer parallel to the present instance, is the twilight of the Roman world. Ancient Rome had a sophisticated economic system in which credit and government stimulus programs played an important role. Roman money, though, was based strictly on precious metals, and the economic expansion of the late Republic and early Empire was made possible only because Roman armies systematically looted the wealth of most of the known world. More fatal still was the shift that replaced a sustainable village agriculture across most of the Roman world with huge slave-worked latifundiae, the industrial farms of their day, which were treated as cash cows by absentee owners and, in due time, were milked dry. The primary economy cracked as topsoil loss caused Roman agriculture to fail; attempts by emperors to remedy the situation failed in turn, and the Roman government was reduced to debasing the coinage in an attempt to meet a rising spiral of military costs driven by civil wars and barbarian invasions. This made a bad situation worse, gutting the Roman economy and making the collapse of the Empire that much more inevitable.

It’s interesting to note the aftermath. In the wake of Rome’s fall, lending money at interest – a normal business practice throughout the Roman world – came to a dead stop for centuries. Christianity and Islam, the majority religions across what had been the Empire’s territory, defined it as a deadly sin. More, money itself came to play an extremely limited role in large parts of the former Empire. Across Europe in the early Middle Ages, it was common for people to go from one year to the next without so much as handling a coin. What replaced it was the use of labor as the basic medium of exchange. That was the foundation of the feudal system, from top to bottom: from the peasant who held his small plot of farmland by providing a fixed number of days of labor each year in the local baron’s fields, to the baron who held his fief by providing his overlord with military service, the entire system was a network of personal relationships backed by exchanges of labor for land.

It’s common in contemporary economic history to see this as a giant step backward, but there’s good reason to think it was nothing of the kind. The tertiary economy of the late Roman world had become a corrupt, metastatic mess; the new economy of feudal Europe responded to this by erasing the tertiary economy as far as possible, banishing economic abstractions, and producing a system that was very hard to game – deliberately failing to meet one’s feudal obligations was the one unforgivable crime in medieval society, and generally risked the prompt and heavily armed arrival of one’s liege lord and all his other vassals. The thought of Goldman Sachs executives having to defend themselves in hand-to-hand combat against a medieval army may raise smiles today, a thousand years ago, that’s the way penalties for default were most commonly assessed.

What makes this even more worth noting is that very similar systems emerged in the wake of other collapses of civilizations. The implosion of Heian Japan in the tenth century, to name only one example, gave rise to a feudal system so closely parallel to the European model that it’s possible to translate much of the technical language of Japanese bushido precisely into the equivalent jargon of European chivalry, and vice versa. More broadly, when complex civilizations fall apart, one of the standard results is the replacement of complex tertiary economies with radically simplified systems that do away with abstractions such as money, and replace them with concrete economics of land and labor.

There’s a lesson here, and it can be applied to the present situation. As the rising spiral of economic trouble continues, we can expect drastic volatility in the value and availability of money – and here again, remember that this term refers to any form of wealth that only has value because it can be exchanged for something else. Any economic activity that is solely a means of bringing in money will be held hostage to the vagaries of the tertiary economy, whether those express themselves through inflation, credit collapse, or what have you. Any economic activity that produces goods and services directly for the use of the producer, and his or her family and community, will be much less drastically affected by these vagaries. If you depend on your salary to buy vegetables, for example, how much you can eat depends on the value of money at any given moment; if you grow your own vegetables, using your own kitchen and garden scraps to fertilize the soil and saving your own seed, you have much more direct control over your vegetable supply.

Most people won’t have the option of separating themselves completely from the money economy for many years to come; as long as today’s governments continue to function, they will demand money for taxes, and money will continue to be the gateway resource for many goods and services, including some that will be very difficult to do without. Still, there’s no reason why distancing oneself from the tertiary economy has to be an all-or-nothing thing. Any step toward the direct production of goods and services for one’s own use, with one’s own labor, using resources under one’s own direct control, is a step toward the world that will emerge after money; it’s also a safety cushion against the disintegration of the money economy going on around us – a point I’ll discuss in more detail, by way of a concrete example, in next week’s post.

83 comments:

"The primary economy of nature, the base of the entire structure, is ignored by most contemporary economics, and has essentially no place in the economic policy of today’s industrial nations."

When I first entered the world of activism I discovered what I considered to be a flaw in the use of the word ignorant. It's so often used in an antagonistic way suggesting that the person or people in question know but are refusing to admit to or act on their knowledge. It occurred to me that often people had no knowledge to admit to or act upon in the first place and what they had was in fact a form of naivety.

After reading the part of your post that I quoted above I had a related thought - that the prime movers and shakers of modern economics are not ignorant of the "natural" world that supplies as you say three-quarters of all goods and services used and abused by us: they are actually barely aware of its existence. At least in any way tangible to them. And unfortunately unless they start taking LSD and going for walks in the forest I don't think they'll be appreciating it any time soon.

I wonder how long the charade of ever increasing debt will be kept up by willful ignorance, by both government and the public, once ecological limits have been broken so far as to be obvious, even to morons and politicians.

I wonder if there are degrees in defining primary and secondary economies.

You mention a vegetable garden being a primary economic activity. Recent impetus has been given to food security, of re-establishing local - say, within a few dozens of miles - production of the bulk of food consumed by a neighborhood or community. Distribution of this locally produced food or other product would seem to be a secondary economic activity, but to the producer a primary activity.

The other thought that comes to mind is with regard to child rearing. When I grew up, parents were encouraged to give their children an allowance, to learn money handling skills. Often the chores assigned to children within the family became paid piece-work, rather than a combination of (primary) exchange of efforts for the common good and essential apprenticeship efforts intended to build character, body strength, and various skills. I suspect a discerning parent should be downplaying the "paid labor" aspect, the secondary economy aspect of allowances, and emphasizing primary aspects ("Do it or you will be punished.")

Does economic descent mean that apprenticeships will be a better choice, economically, than technical schools and universities, for adults as well as for raising our young?

"flooding the markets with cheap credit simply accelerates economic imbalances that are already battering economies around the world".

Governments are suffering from "Man with the Hammer" syndrome, which is when to the man with a hammer every problem looks like a nail.

The public had access to relatively cheap credit until a few years ago. Now, since the public either can't or won't swallow any more governments have switched to giving institutions almost free credit. They borrow (from future tax payers whoever they may be), at around 0.5% and stick the cash straight into a Treasury, Bund or Gilt, guaranteed by the state. For this financial acumen they get around 4%.

The tertiary economy gets ever more amazing and, desperate. It's like playing a game of pass the parcel with a bomb.

JMG - I appreciate all your intelligent posts. I wish to respond to this paragraph in the current post: "The problem we face now is that the arrangements evolved over the last century or so only address the relationship between the secondary and tertiary economies. The primary economy of nature, the base of the entire structure, is ignored by most contemporary economics, and has essentially no place in the economic policy of today’s industrial nations. The assumption hardwired into nearly all modern thought is that the economic contributions of the primary economy will always be there so long as the secondary and tertiary economy are working as they should. This may just be the Achilles’ heel of the entire structure, because it means that mismatches between the primary economy and the other two economies not only won’t be addressed – they won’t even be noticed.I agree with this, and direct your attention to the response of Evo Morales' convening of the World People's Conference on Climate Change and the Rights of Mother Earth (website: http://pwccc.wordpress.com/)in Cochabama, Bolivia in April. Please read the Peoples' Agreement or the Cochabamba Accord as a response to the Copenhagen Accord. It is a summary of the conclusions of the 17 Working Groups and acknowledges indigenous vision and wisdom which addresses "the primary economy of nature" as the "Rights of Mother Earth", a whole different consciousness of the sacredness of Mother Earth and value system of "living well" ) el buen vivir rather than the paradigm of never-ending economic growth. I think, we in the developed industrialized world, who is causing our climate crisis - such as the melting of the Andean and Himalayian glaciers - should align ourselves with this new world movement for the rights of Mother Earth - a movement from the bottom up rather than top down UN nation state response. I hope this make sense.

Towards living well on Mother Earth,

Bing Gong (cohost of Post Carbon on KWMR - Community Radio for West Marin - website: wmpostcarbon.com)

PS - We would like to interview you again. Please respond to bgong@telescience.net

Hi John, excellent post as always. I've started reading about economic history by purchasing a copy of The Great Crash 1929. Can you recommend any other books that cover the topics mentioned in our post? For example the boom-bust cycles prior to 1929?

"the only tools governments have available these days to deal with economic trouble are ways of fiddling with the tertiary economy" - quite true, but it also seems that for some reason they (the rulers and the economic wise ones) fail to grok the predicament's roots in the primary economy. Maybe it is because those roots are out of their ken.

- I think that this is one of your most important posts - not because of new ground or insight, but because the work is approachable, light, and able to weave in ideas which may be unfamiliar - all in an accessible fashion.

The idea of Goldman-Sachs execs holding off a focussed medieval knight or 10 (while inevitably babbling, trying to buy them off with a better bonus) was mightily amusing :)

Again, this is a most approachable piece and I will commend it to my friends (who normally avoid these subjects). This one deserves a bigger audience.

You are correct in asserting that the highly complex global financial system is likely to fragment into more local and less complex pieces.

However, I think money will continue to exist in some form as long as people need to exchange goods. It's a simple, convenient technology that makes a lot of sense. Basing a currency on something like precious metal makes sense because it is rare and non-consumable. Gold can't be faked and getting it takes a lot of work to produce. The problem now is that money is not based on rare materials, or even cheap materials like paper, but instead a bunch of numbers in a computer. Its easy to just tack on a few zeros, and highly beneficial to the people in a position to create those zeros.

That said, I think the most valuable possession in the future will clearly be land. It is the basis of productive capacity, without which money is ultimately meaningless. I think more people are coming to this realization and hopefully it results in better stewardship of the soils, waters, atmosphere and lifeforms of our world.

- bromius

(I really enjoy your writings, thanks to Olafr at peakoil.com for giving it a plug.)

John, In the simple model, primary, secondary & tertiary levels of the economy are "nature" "work" and "money". We seem to keep leaving out what is the clearest evidence of why there are such persistent problems with coordinationg them.

The "work" economy has to produce a profit to remain stable and earnings are based on skill in delivering value using energy. The "money" economy, though, has to multiply profits to remain stable, and earnings are based on a multiplier of past earnings. Q.E.D. That's a problem whether you live in a physical world with hard limits or not. We also do live in a physical world where the use of money to multiply appetites has visibly created scarcities and conflict as the end to growth rather than bounty.

That's the whole heart and core of our little "physical world problem". Money can be used to multiply our promises to create material wealth without regard to the physical possibility of it, and nearly everyone really believes it should continually do so.

I'm thinking maybe people like promises because that's something tangible to them, and reality isn't.

I'm finding that in discussions with most people around me who are unaware of peak oil concerns, the prediction of Western decline is easier to explain than the decline of industrial civilization as a whole. Mainstream media has been discussing the rise of China for a long time now, after all.

Still, I suspect the West's awareness of its potential vulnerability is shallow. People are looking to China as the next "upstart", at best a worthy challenger comparable to the old USSR. The thought that Europe and North America might gradually just become distant corners of the world of little concern to people living in other continents seems impossible - it's so hard to grasp that many Westerners fail to understand that that's precisely what Europe *was* until 1500 AD.

This is how I explain it to people in brief: "A hundred years ago, we [the West] ruled the world through undisputable superiority in industry, technology, military and access to energy. Today we no longer have the industry or the energy and only the semblance of military strength. We make a whole lot of paper however, while the real industrial nations in Asia patiently co-operate as long as Western paper can be exchanged for real, physical, resources for their industries."

The stage has been set for a rapid collapse of the West, because the current facade of Western wealth no longer reflects where the resources are and who's making things out of them. All it takes is a bit of disbelief. That's precisely where the current pressures on the financial system are taking us.

The condition of the US military is vital in this situation. It can be expected to enforce the current Western order, but its ability to do so has been visibly waning in the past years. That's why upstart Latin American leaders like Hugo Chavez can stay in power and behave in ways they could never have done 30 years ago. The current wars of occupation, along with peak oil, are gradually sapping the strength of the US warmachine. As its weaknesses develop and are revealed, more leaders will dare to challenge the current system until we reach an eventual tipping point.

Personally I expect that tipping point will come within then next 20 years.

In a larger context, the decline of the West is a big first step in the decline of industrial civilization. Even if China becomes the new Great Power, it cannot hope to project its power the way that Westerners did through the 20th century. Rather, it becomes the top dog in the new Age of Scarcity, as JMG defines it.

The peasants did not handle gold or silver or for that matter copper. But the feudal lords kept using those tokens all through the 1000 years of the middle ages.So even then there was a functioning tertiary economy.So it is never a case of all or nothing. The whole difficulty is to keep these economic sectors in balance. The first civilization to succeed in that endevour will be the one standing for more than merely a few hundred years.

Xhmko, I meant "ignorant" in a less pejorative sense -- perhaps "clueless" would have been the better term. You're quite right, of course; for most of the people who play a significant role in modern economics, nature is something that exists off somewhere else, for the purpose of recreation.

Onion, I don't think all the ignorance is willful by a long shot. To grasp the role of ecological overshoot in our economic troubles requires a revolution in our thinking and the abandonment of some of the most unquestioned assumptions of modern life.

Brad, gardening is a secondary economy activity -- it uses human labor to produce goods -- but it relies intimately on the primary economy of topsoil, earthworms, seed stocks, and the like. As for apprenticeships, absolutely -- the careers that will make any kind of sense in the near future are those that involve actually making goods and providing services for people, not manipulating abstractions for governments or businesses.

Ramps, that's a good metaphor. The question is how soon the bomb goes off!

Matthijs, Galbraith's A Short History of Financial Euphoria and Charles Kindleberger's Manias, Panics, and Crashes are good places to read up on this.

Robin, if everything you've ever been taught tells you that human beings are the effective center of the cosmos, and everything else is just a passive backdrop for some grand story or other of human progress, then the primary economy is utterly invisible -- and the possibility that it might not provide you with whatever you happen to need from it will never enter your darkest dream.

Disillusioned, thank you! Yes, I'm rather enamored of the thought of Goldman Sachs executives trying to parry battle-axes with briefcases.

Michael, no doubt money will exist in some limited form, but you ought to take some time and read up on just how minor a role it's had in times of the sort we're entering. While it has advantages, it also has crippling disadvantages, and when the latter outweigh the former, it's remarkable how fast people find ways to do without it.

Phil, exactly. Add physical limits to the mix, and you've got a profoundly unstable situation in which monetary wealth is still ballooning while the actual, physical wealth to back it up is dwindling. Eventually something has to give.

Oskar, exactly. Just as the US empire is much less powerful than the British Empire was, the Chinese empire will be weaker than ours, and may consist of nothing more than a very strong navy, a network of naval bases scattered around the globe, and a military presence in a few crucial areas.

Armando, during the early Middle Ages a great many feudal lords had little more use for money than the peasants who worked their fields; labor-for-land exchanges and in-house production took care of nearly everything. (Your ordinary tenth-century baroness spent nearly as much time spinning and sewing as did the wives of the local peasants.) Only with the return of long-distance trade and the rise of mercantile classes in the resurgent cities did money start to come back into vogue.

Tony, I'm very much of two minds about local currencies. Much depends on whether they can be gamed by speculators, even on a small scale.

People have always needed to exchange goods, but in the history of Medieval Europe there have been times and places where money was not being coined at all. Coins from older times and far-away places continued to circulate, but they had only a historic "face value," which had no bearing on what you could buy with the coin. (Often enough, the face value was in some language like Greek or Arabic, which even the nobles and most of the clergy couldn't read.)

The actual value of medieval coins was usually determined by the weight of precious metal in each individual coin. This could be affected by clipping, and also by several less easily detectable kinds of alteration.

Thus, the Medieval hoards of coin that have been found in our times usually mingle coins with lots of scrap precious metals and with raw bullion. (An ounce of gold is an ounce of gold, whether it is a coin, a part of a coin, or a broken piece of a dead king's crown.)

This state of affairs lasted, in the Americas, well into the early 19th century, where silver coins of a certain weight were often cut into eight equal parts, or "bits," and each "bit" could be a unit of exchange according to its actual weight. (Hence the old slogan, "two bits, four bits, six bits, a dollar.")

So the admitted convenience of money as a medium of exchange certainly wasn't enough to ensure the continuance of money (as money, not as such-and-such a weight of precious metal). I expect that this pattern will repeat itself within the coming century.

Excellent analysis as usual. I am reminded once again that history as taught is high school could be endlessly fascinating if it weren't for the fact that it is taught as propaganda to justify current arrangements. I am also reminded once again that everyone that contemplates peak oil and collapse has a favorite period in history or social arrangement that he/she would like the current situation to collapse into, anything from 19th century industrialism to small town living to frontier farming to neolithic hunting gathering. Nobody seems to suggest feudalism as a potential post collapse arrangement that would best suit our needs. Has feudalism gotten a bad rap or is it really as awful as portrayed in our popular culture?

JMG,Excellent examples - Mayan pyramids and Roman coins to stave off primary economy problems.How about Easter Island. The response was to build larger and greater statues to appease the gods. Moving these large stone blocks required the cutting of the last of the trees as levers and rollers, leaving no trees left to build fishing boats.

Mageprof, quite true. It'll be particularly interesting to see what happens with our contemporary money, which is basically worthless -- well, I suppose you could melt out the zinc inside pennies if you needed zinc bushings for a repair job on some piece of salvaged machinery, but that's about it.

Wolfgang, feudalism has definitely gotten a bad rap. Heaven knows it has massive flaws, but then so does every other human social system, ours included. What feudalism does, and does extremely well, is replace the violent chaos of a post-collapse world with a rough but functional rule of law and a completely decentralized system of social organization and collective defense. That's why it tends to spring up in the wake of most fallen civilizations -- and yes, it will almost certainly spring up in the wake of ours.

Thank you for this post, John Michael. It's just in time. Tonight I'm attending a meeting about "strengthening our local economy" in Columbus, Ohio. It's sponsored by local Transition Initiative people. It'll be interesting to learn if by investment in local businesses they mean "more debt" and a continued addiction to the tertiary economy, or if they're looking to actually step away from that and rebuild a local secondary economy that lives within the necessary world of the primary.

"unless they (economists, et al) start taking LSD and going for walks in the forest I don't think they'll be appreciating it (the primary economy)any time soon."

Maybe its time to update ol' Tim Leary's mantra for the present day:

Tune in (to the fact we live in a resource limited world)

Turn On (to what you can do in cooperation with nature to provide for yourself and your family)

Drop Out (of the money economy to the greatest extent possible)

Fortunately it doesn't take LSD or any other psychoactive substance to do this.

@Michael who writes:

"I think the most valuable possession in the future will clearly be land."

Very true! The parcel I bought some 30 years ago was the second smartest decision I ever made (the first was marrying my wife). As I recall, in the pre-industrial era, a persons wealth was not measured by how much money they had, but by how much land they owned.

The sad thing is that most people are unaware of the advantages of owning land and will gradually spend themselves into poverty trying to buy increasingly expensive gasoline, heating oil, etc, to maintain their status quo, until they no longer have the resources to buy a piece of land.

When i mentioned the use of Precious metals in the Dark Ages, note that they were rarely utilized as tokens for barter but more for their ornamental or metallurgical value. Of course in those times, only the top 0.1% of the population must have ever even seen them (royalty and high clergy). But they were recorded transactions in gold and silver bullion for ransoms, dowries, and of course the most important commodity to be ever bought with gold: prayers. Tributes to the church ranged from the Clovis era (470AD), Charlemagne (810AD) all the way to the renaissance of proper coinage in the mid 1300's.

The center of the message is that it would still count as Greer's tertiary economy given that the only money transactions of that time dealt with what is arguably one of the most intangible commodities of all time: The salvation of the soul!

Well, I suppose that explains why my last comment didn't pass moderation. I agree about the middle ages to an extent--they weren't so culturally benighted as popularly imagined (and evidently I've habitually mis-dated the European witch-hunt crazes), however the ecclesiastical and political environments of the times still do not appeal (as if they'll ask me first). (I do not believe that the later middle ages were very good to the forests, either.) A grand ultimatum between imperialism and feudalism is disheartening indeed to contemplate. Add in the other large organizational efforts of our species, and they start to look a lot alike from a certain distance.

Anyway, my comment was that it's not too hard to imagine Goldman with mercenary (or borrowed federal) armies, since, after all, that sort of tactic was deployed a hundred years ago here in the States by various industrialists when conflict between the secondary and tertiary economies came to a head.

"The primary economy cracked as topsoil loss caused Roman agriculture to fail; attempts by emperors to remedy the situation failed in turn, and the Roman government was reduced to debasing the coinage in an attempt to meet a rising spiral of military costs..."

Tainter argues that loss of soil fertility was not the main cause of decline in agricultural output, but rather the imposition of unbearable taxes. He points out that large areas of arable land at the bitter end of the Roman Empire were abandoned. It was not for loss of fertility that they weren't farmed; it was due to crushing taxes that farmers could not pay, even under threat (and use) of force. Tax structures in the US seem to be following the same path he describes, by favoring larger operations (in this case corporations) while squeezing out small businesses, but perhaps I've been reading too much Mish.

I know you didn't get into this detail in your paragraph, or maybe you disagree with Tainter's analysis of this point, but I thought I'd point it out. I'd also say that taxes can always come in a non-monetary form (commodities, property, forced labor, military conscription).

So I am wondering whether you are trying to shelter your readers from such frightening prospects, or whether you believe that in this incarnation of history our governments will either be blind to non-monetary forms of wealth and leave the small subsistence farmers alone?

The Financial Permaculture (whatever that is) crowd around here are dabbling in local currencies. The hillbillies are talking about barter and trade-for-labor, systems that have actually never died out in rural America. Personally I'd bet (a dozen chickens or two days labor) on the hillbillies; that system has existed for most of history throughout most of the world. Local currencies have much less of a track record.

JMG:"Oskar, exactly. Just as the US empire is much less powerful than the British Empire was, the Chinese empire will be weaker than ours, and may consist of nothing more than a very strong navy, a network of naval bases scattered around the globe, and a military presence in a few crucial areas."

Agreed. What interests me how such a China might prioritize the different parts of the world. Would it spread thinly and widely or concentrate its strength in specific regions, leaving less interesting continents to whatever smaller powers are around?

My (somewhat blind) guess is that it would prioritize strategic resource areas in Central Asia, the Arctic, and around the Indian Ocean (from Africa to Oceania, including Australia). It might seek opportunities that come up elsewhere but mostly avoid costly commitments in the Americas and Europe.

It might just happen that the 21st century will be Latin America's first century of relative freedom from foreign exploitation. After so many centuries of domination by foreigners and their local allies, the population may just be restless enough as well as distant enough from foreign powers to be left to their own devices... for a while. There's certainly no lack of support there for anti-foreign leaders, or admiration for past ones who've been systematically weeded out by colonial powers.

The unbelievable splurge of debt indulged in by the US and Europe are the exact equivalent of taking a wino out of the alley, giving him a clean suit of clothes, and the key to the local liquor store. The problems are debt and fraud, and tripling the debt in order to cover up the fraud is a very short-term solution indeed.

While the idea of Blankfein or Paulson up against the Black Knight is entertaining, for effectiveness I prefer the traditional American method of dealing with dishonest bankers. It involves outraged depositors, a lamppost, and about 20 feet of hemp rope.

While hard currencies are in many respects better than the ephemeral money we use today, they are not immune to the problems of debasement, credit collapse, inflation, nor accounting fraud. despite it's physical nature, hard money is still an abstraction, which has value only because people agree it has value.

David, glad it's timely. One thing the community could do that would have a real effect is to boycott big box stores wherever possible, and spend the few cents more to buy from locally owned stores.

John, a good spouse and a good piece of farmland used to more or less sum up the essentials of human happiness for most of our ancestors, so you're on the right track.

Armando, true enough. I tend to think of precious metals in a setting without coinage as just another commodity -- those same kings donated a lot of other raw materials to the church for the benefit of their souls, too.

Keifus, it never hurts to read the paragraph right above the comment box! I certainly don't consider the Middle Ages a utopia; they were a very harsh time, and the feudal system was simply the option that happened to work.

Blue Sun, I think Tainter's underestimating the impact of topsoil loss and other ecological factors here, though of course he's right that taxation and other forms of bad policy also played a large role. As for labor taxes and the like, of course those will happen; they happen in every society complex enough to have something worth taxing. (The traditional rules of who shares what food with whom fill the role of taxation in hunter-gatherer societies, for example.) The inevitability of death and taxes remains; the question is simply how to deal with the rest of life.

Bill, I'm with the hillbillies. Barter, trade-for-labor, domestic production, and gift economies are the lifeblood of rural societies everywhere.

Oskar, my guess is that they'll concentrate on the Indian and Pacific Oceans, as much for defense as anything else, and on land acquisitions in Southeast Asia, the Pacific islands, and East Africa. Still, it's a guess. As for Latin America, you're likely right -- and it's by no means improbable that one or another of the Latin American nations may evolve into world powers on their own account a little further down the line.

Regarding 'feudalism' etc, are you ever going to address the issues of violence, weapons ownership, and the need for personal and communal security that will come with the breakdown of the larger social order?

Hi, JMGI like your extension of Schumacher's primary and secondary economies to a third economy of money. I find it conceptually helpful. Can you explain how you (or Schumacher) quantifies the relative contributions of primary and secondary economies?

I can see that the oil driller and refiner and distribution chain adds (some) value to the oil. How can we arrive at the conclusion that the oil in the ground is 3/4 of the value "at the pump?"

Or, with respect to microscopic life in the soil: without it, we have almost no food-the soil is very unproductive. How do we conclude that it's contribution is 3/4 that of the gardener/farmer?

I am asking because I'd like to be able to explain these distinctions to others.

Changing the subject slightly, don't you expect that the "jobless economic recovery", which Larry Summers ascribed to the "unexpected rise in productivity," represents the illusory high productivity of tertiary economic jobs? One broker can sell a million dollars of stock in an hour, booking, say, $50,000 in "value added" commissions, and be ascribed $50,000/hour productivity.

John - I'm not sure if you keep saying it better... or if I just keep getting better at getting it. It seems like something "new" is going on between my ears.(obviously, there's no need to answer my "Attaboy!")THANKS!

I believe that the concept of precious metal as a form of exchange came about when some observant person noticed that pure gold made a different kind of mark when rubbed on a touchstone, than gold that had another metal added to it. Add in standard weights (pounds sterling?) and you have money. Pity we dont have touchstones for dollar bills

Hi Wolfgang

“Nobody seems to suggest feudalism as a potential post collapse arrangement that would best suit our needs. “

Over here!I suggest a form of feudalism as most likely wherever there is a reasonably dense population. In fact I'll go one further and suggest that despite the bells and whistles, labels, misdirections and subsidiary structures that keep us entertained today, feudalism never really went away. There is nothing inherently “bad” about feudalism, however like every other social system Habgards law will operate. The lords temporal and the lords spiritual (lords industrial, lords technological, lords financial?) will forget that the power they wield is not inherent in them but is borrowed from the masses and limited by the real world that sustains their all too human biology. Which leads to..

“Has feudalism gotten a bad rap or is it really as awful as portrayed in our popular culture?”“Popular culture” is the clue here. We pay attention to messages more for their entertainment value than for their informational content. Stories about happy times generally dont make it to the best-sellers lists. This rule applies whether the book is fictional or historical.

You tell such a good tale that as usual, I picture myself living in these new (old) social structures. I suspect, from reading some of the comments, that others do this too. But it's important to keep in mind that no one reading this now is likely to live in a feudal society. We'll all be struggling to survive the beginning stages of the end of the present industrial empire, and hopefully saving some things of value (knowledge, mostly) to pass on to those future generations. There must be long period of chaos before any future stable solutions are reached. Still, contemplating the nature of what may be coming, both short and long range, is worthwhile.

"...The implosion of Heian Japan in the tenth century, to name only one example, gave rise to a feudal system so closely parallel to the European model that it’s possible to translate much of the technical language of Japanese bushido precisely into the equivalent jargon of European chivalry, and vice versa..."

This is a new observation for me. I really, really appreciate your writing, JMG.

Dear JMG, Thank you for the sobering post. Your roots grow very deep, don't they? On with my garden weeding. The goat manure which I bought from a neighboring farm had grass seed in it, and I have a heady crop of it. Don't let the internet go away too soon, I still need you. :)

Danby, call me a romantic, but I'd rather see trial by combat. As for the limitations of precious metal currency, exactly -- it avoids one set of problems (the ones made all but inevitable by fiat currency) but has its own drawbacks.

William, the 3/4 figure is from Richard Costanza et al., "The value of the world's ecosystem services and natural capital" (1997). It's not meant to apply to every economic interaction with nature; it's an estimate of the total value of nature's contribution to the human economy, as compared to the total value of all human economic activity. As for the "jobless recovery," exactly -- the only thing that's recovering is the part of the tertiary economy that's shoveling smoke.

Nebris, probably not; that's far and away the most overemphasized dimension of the entire subject of the Long Descent, and nothing I say is likely to have the least influence on the dogmatic and overemotional views on both sides of that hyperpolarized issue.

Dan, getting something new going on inside people's heads is what this whole project is about. Thank you.

Wordek, true enough. The funny thing about feudalism is that our popular culture despises it and glorifies it at the same time.

Twilight, you get the gold star for most perceptive comment today. Exactly; the feudalism of Dark Age America will emerge in its own time, several centuries from now, when the remnants of today's social structures have come so completely unglued that there's room for new modes of social organization that don't simply shuffle existing ideas around a bit.

Petro and George, thank you!

Ariel, I've got crabgrass coming up here and there in my garden, so I can sympathize! As for the internet, not to fear; if it starts becoming unstable, I've got a Plan B in mind using old-fashioned print media.

I can understand your reluctance to get tarred with the brush of wild eyed Survivalism. Yet a significant portion of what you address here is, in fact, Survivalism, albeit of a sober and reasoned variety. And you are a Voice in this discussion, one that many listen to and respect.

So I would opine that having taken on that type of responsibility, it would behoove you to also address what is certainly going to be a crucial part of a post-industrial world. At the risk of indulging in the hyperbole you rightfully deplore, your influence – or lack thereof – could very well be a matter of life and death for some who are presently looking to you for advice and guidance.

“hard money is still an abstraction, which has value only because people agree it has value.”

This got me thinking about the other things that have value only because people agree on value. And you know what? Thats everything!

Given this perception, I will now assert that wherever the opportunity exists for “something” to serve as a medium of exchange between humans, that something will appear. Could it be that the MAD (money acquisition device) is as innate as the LAD (language acquisition device)?

Hi JMG

“The funny thing about feudalism is that our popular culture despises it and glorifies it at the same time. “

"Across Europe in the early Middle Ages, it was common for people to go from one year to the next without so much as handling a coin. What replaced it was the use of labor as the basic medium of exchange. That was the foundation of the feudal system, from top to bottom:"

Nature, red in tooth and claw to quote Alfred Lord Tennyson. By replacing currency with labour as a unit of exchange, people are actually rejoining the primary economy which is in effect an acknowledgement that we are all animals and no amount of technology can separate us from the natural world. What is also implicit, but left unsaid in your quote above is that those people that do not work, simply do not eat under such a system.

It is an unpleasant truth that in the animal world, the very young, the very old and the very sick become food for another part of the nutrient recycling system. I always wonder how many people in an industrial society are actually up for a hard day of manual work, knowing that they may have to get up the next day and repeat it?

The most efficient human enterprise is that which is up to but not quite at the point of requiring a supervisor. As this tipping point is surpassed a production surplus is required to support this individual (or group thereof). These guys are the passengers in any system and they will hang onto their perquisites at all costs. They have always been around our society and will continue to be so in the future.

The unfortunate side of the feudal system is that the feudal lord could demand an amount from their serfs that was in excess of a reasonable surplus. Enlightened dictatorships are few and far between whilst greed and laziness seem to be quite common.

I suspect the feudal system will provide it's fair share of ups and downs for any population. Mostly it will be simply unpleasant and hard work.

I don't look forward with any eagerness to a return of feudalism, but if it's coming, it seems to me my main concern should be figuring out how my kids can avoid serfdom. Most of humanity will, in your scenario, have a somewhat Hobbesian existence--nasty, brutish and short--and a small number of people will be intellectuals, skilled artisans, or lords. How can we make sure our kids are among those groups? I wonder if making a lot of money in our doomed economy might not be a better bet than, say, becoming an organic farmer. To be sure, organic farming seems more appealing to me in the short term than going to work for a bank, but long-term, I wonder.

JMG,One of the main things that keep me in the formal economy (tertiary) is the need to have health insurance for my sons. My wife and I have no mortgage of car payments and I probably could start some type or more likely types of cottage industries to provide cash income. I already participate in an informal barter economy were I trade produce and labor for more produce and labor. If we had true socialized medicine in the country I believe that I would leave the economy (or if I could find a MD who will trade services for melons or small engine repair). I wonder how our future feudal system will take place and what it will look like. I imagine that here in the deep south it will resemble the plantation share cropping system, but in New England (where we hope to relocate in the near future) with its town meetings and more localized government there is hope that a more equitable government system might exist.

Nebris, just now the entire issue of violence is so tangled up in bizarre cultural mythologies and political polarizations -- on both sides of the spectrum, mind you -- that very nearly anything I could say about the subject would be misunderstood in ways destructive to the broader project I'm trying to advance. It's an issue I've considered at quite some length, but it's not one I think it would be useful to discuss at this time and in this forum.

Wordek, er, not everything has value because we decide to give it value. I promise you that if you ever go a week without a meal, the radically nonsubjective value of food will become very, very clear to you!

Cherokee, the interesting thing is that the average feudal peasant worked fewer hours under better conditions than the average Victorian factory worker. Hard work and exploitation are pretty much universals in human society -- we forget this in the industrial world these days, for the simple reason that we've offshored most of both to the Third World.

Pgrass, you might want to talk to your local MDs. Many of the health care providers I know are just as sick of the corrupt and dysfunctional American health care system these days as anybody else, and you may just find somebody willing to cut you a cabbages-for-checkups deal. That sort of thing is likely to be the wave of the future.

eric,If that's your concern there is an obvious historical example to go by. Several actually. The people who wind up on top of any societal collapse are always the military elite on the winning side under the old regime. Virtually all European titles of nobility are derived from Roman army officer ranks, for instance, and virtually every royal house is descended from either a tribal chieftain who beat the local Roman garrison, or the commander of the local garrison who took control when it seemed Rome was no longer in a position to enforce it's will.

So if you want your descendants to rise to the top of the possible future social structure, get them into one of the military academies. Maybe the Chinese Red Army one. Or maybe with the Falun Gong when they take control of China.

That's the hard part you see. Who's going to win the military conflicts that inevitably attend Imperial collapse? Will it be better to be a Colonel in the US Army or a Captain in the Cavalry of the Northern Mexican Empire (encompassing large parts of Washington, Oregon, California, Nevada, Utah and Colorado)? A Major left behind in the frantic rush of the Marines out of the Middle East, or a war heeler in the People's Republic of Eugene?

There's no way to tell, and very little one can do to force the outcome.

Hi JMG“I promise you that if you ever go a week without a meal, the radically nonsubjective value of food will become very, very clear to you!”

Hmmm. The phrase “will work for food” springs to mind. Surely a week without eating would influence the food-to-labour value perceptions of any of us?

Hi Nebris

“crucial part of a post-industrial world”Crucial is a funny word to use here. I live in a large city and what you are proposing we examine is “crucial” to my survival right here and now. However that “cruciality” breaks down to about two minutes over the last decade where luck and some fast talking played as large a part as any other preparations I've made.Besides which, it always happens that when the discussion takes that turn, everyone suddenly wants to be “Conan”, but nobody wants to do the washing up.And while a good Hollywood script might come out of it, for the vast majority of people, (you know- all the ones that didnt make it into the history books) the threat of violence is not usually a major consideration influencing their ongoing survival.

Now, all that being said, if JMG will permit the comment, in my opinion the most effective aggression survival tip, you could receive, the one that has been THE most consistently successful throughout all history is this:

I've never quite understood the obsession with the western work week as I've always felt that it was too rigid. It would however, make for a fascinating historical study. Over the years, I've negotiated non standard work arrangements with employers, but I can assure you that it is given grudgingly and they don't like you for it, even if it's in their financial interests. Very strange... To do anything remotely different from the societal norm places you on the fringe. Ever noticed that vegetarians are not out and proud? I think they are reviled so much because they hold a mirror up to people and those people don't like what they see. An alternative perspective is that people view difference as a threat.

In an agricultural society as you quite rightly point out work revolves around the seasons and crops so the time spent working is sporadic and this practice continues even today, even with our longer growing seasons due to climate change. They actually have a lot more down time and the result is that they tend to have a stronger community, local knowledge and hands on skills.

The life of peasants in a feudal system has always been portrayed in a negative light so it is interesting that you say that their working conditions were actually not too bad.

I do think that you glossed over my point that once an industrial society declines, it will actually be survival of the fittest (or those with access to the most resources). I'm not personally excited about this, but it seems like a common sense outcome as medical care is drastically cut back. Many weeks ago someone on this blog pointed out that simple accidents will become life threatening, well the same is true for disease. Cholera was only eradicated in Melbourne a bit over 100 years ago and we have an amazing sewerage infrastructure as a result.

A good barometer for the status of a society is it's treatment of human wastes. The technology and understanding is out there to process it in a manner which has positive outcomes for the environment, but most people give little thought to this. However, if the power was lost to the main sewer pumps, next to the food and water supply it would be of immediate concern to most people!

What troubles me is that of late the U.S. economy seems to be almost totally tertiary. Finance comprises 41% of GDP as of 2010. In 1950 that figure was about 9%. It is still climbing.

You might assume that the other 59% is still goods and services but even here you'd be somewhat mistaken. We don't make much 'stuff' here anymore--manufacturing is down to something like 10% of GDP and much of what is called the service economy comes down to services that actually monopolies set up to rob people--energy monopolies, electronic access monopolies, communication monopolies, etc.

I think we have become so disconnected from practical things and from the earth that it now amounts to something like cultural psychosis. Paid work is rarely even about anything anymore--if you can even get paid work. Paid work is mostly about being part of a human shield to protect CEOs from customers, and little else. A collapse might be a good thing. I hope it comes soon. Awesome blog BTW.

Danby, that's exactly the challenge with politico-military responses to the decline of a civilization: it's anybody's guess which way the dice will fall. Fortunately, there are other options.

Wordek, oh, granted, how the radically nonsubjective value of food will reshape behavior is a complex thing. It's simply very uncommon for those who haven't eaten for a week to find food of no particular value!

Cherokee, that may be a difference between your side of the ocean and mine -- most of the vegetarians I've met are not only "out and proud," but rather aggressive about trying to push their diet on other people. As for human wastes, bingo -- which is one of the reasons that composting toilet technology is well worth preserving.

Ariel, thank you for the link!

Pamela, an excellent point. You're quite correct that most Americans these days don't actually produce goods or services -- they fill roles in public or private bureaucracies. One of the most crucial steps most of us need to take, as a result, is learning how to do things that actually produce something of value for people.

The Daily Show highlights the thievery of the banks and ends by saying they can have all the money; the rest of us will form a "nut-based economy" -- and just pray that none of the bankers are squirrels. He must have been reading the Archdruid Report.

I guess the point that I had in mind, but didnt make so well, was that any interaction between people qualifies as an exchange of some kind and can therefore be ( rightly or wrongly ) viewed through a pair of economic goggles. Whether those goggles are rose tinted or not is another matter. I hope this clarification has value ;)

H Cherokee“An alternative perspective is that people view difference as a threat.”

In “steps to an ecology of mind”, Gregory Bateson defines difference as the basic unit of information. ( I would also add unit of perception to that). In a clock regulated binary system (what you are looking at now), that which counts as a signal is not so much the 0 or 1, but the change (or lack of change at a particular clock tick) between the two values.

We cant help but notice difference, and in a sensory deprivation tank what we are being deprived of is not sensory information (our senses are still functioning), but the usual ongoing flood of “news of difference”.

How responses to difference are generated, either with aggression, opportunism or dismissal etc is another phenomena, however:I made a point in an earlier comment about hiding being a good skill to have. I think survival of the fittest may not be the ultimate rule when “times are interesting”. I have a feeling that survival of the blandest might fit into the picture quite well also. Perhaps in the anti-spirit of non-Darwinism we could call it “The Law of Natural Un-Selection”And dont fight habgards law. In order to prosper, embrace it and become (neither the best nor the worst) yes man in whatever system you depend upon.

First post here from a 'lurker' from North Devon, England. 'Many thanks' to everyone posting here over the past few months - this is very useful stuff.A couple of observations:'Money' is not just a 'medium of exchange' but has a function as a 'store of value'. In other words I use it to ensure that I will still be able to eat when I'm sick, on vacation or old. Simple barter does not provide for this. A LETS system may work. Otherwise I have to rely on friends, family, friendly society, charity. Two words not used explicitly here very often are 'equity' and 'justice'. I need to ensure that my feudal lord does not tax me too harshly. In England in feudal times a large proportion of the land was subject to 'commoners rights' - the local peasants could use it in various ways for their own benefit. These rights were stolen and nowadays city money is buying up land, although they often don't use it to grow food. Large landowners will be in a position of great power and may well abuse it. There will certainly need to be some political re-alignment.

An aside: Celebrate a tiny victory with us - Leon County Commission (Florida's capitol) adopted a Human Rights Ordinance that adds protections for LGBT community in housing, employment & accessibility. Years of hard work versus mobilized opposition, perhaps more symbolic than real, suggests that an inclusive, little "d" democratic future may be possible where people band together and work locally.

In transition, we participate in both money and barter economies. As for a metal that could be used as a means of exchange - titanium. Currently collecting titanium sporks, functional, small enough to carry and could be combined to create other tools. Titanium's $1000 "bill" - a bike frame... Way cooler than a gold tiara;-)

There's a notion dancing around here about how much physical work it's all going to take to regain our collective sanity and outlast all the bubbles popping around and within us.

I've tended to discard "survival of the fittest" with "tooth and fang" as remnants of the view of evolution as a purely competitive sport. But of course, in every turn of the tide, the physically as well as mentally fit certainly have an advantage, and mental fitness now means a grasp of the "cooperation" side of that scrum.

(aside to eric; kudos for caring for your kids, and maybe their best hope involves looking after the neighbors, too. But "me and mine" thinking is one of the over-priveliged behaviors we could all stand to lose.)

But most of my neighbors' idea of physical fitness involves wrestling with a machine at the YMCA. Their health club memberships recieve plenty of good-natured grief from me, as I invite them over for a weeding workout or a set of compost-turning reps. Maybe there's some social benefit to being a member of the club; I wouldn't know...

Our cultural gag-reflex to physical labor rears its prissy head everywhere, even in the otherwise profound body of work now known as Permaculture. All other valid criticisms aside (and there are plenty), every time I come across some P-notion that will "save labor" I just cringe and think, who the hell is reading this, Betty Crocker and white glove brigade? Let's chuck our "labor-saving" psychosis out with the electric can-openers and carpet cleaning robots. Is there a landfill big enough for our over-sized brains?

Anyone who indulges in any form of work-avoidance will feel they must read every Permaculture book in print before pressing spade to topsoil. And the majority of Permaculture students are primarily engaged in the mental activity of "design exercises" which is, of course, fantasizing by definition. Okay, step one, zone zero.

The truth is, any of this food-growing business, getting all those hidden food forests to exist, will take an amazing amount of sheer hard work. The Perma-culture's prejudice against the rudimentary row-cropping of annuals also hides this bias against the simple sweat equity required to remedy our various debts of physical and mental bloatation.

In the temperate climates, any lasting food-supply infrastucture must be grown one step at a time, one growing season at a time. First the annuals come to maturity, then the perennials, then the trees, kind of like natural succession.

In other words, the path toward any perennial culture must go through the humble garden gate. Full-blown food forests take years longer to appear than their drawings may reveal at first.

And not having an aversion to manual labor is not going to cut it. That's a double negative, and to git 'er done we have to be doubly POSITIVE. You have to LOVE it, you must actually enjoy getting hot and sweaty and sore and tired and truly productive in order to feel inside the deep satisfaction of being alive on some of your own terms.

A feeling I recall described in the last two lines of a favorite Wendell Berry poem:

Dear AR, I liked *Wordek*'s aggression response of "hide". New website agrees, "distance and cover, gained discreetly if possible" are your friends. I was always amazed that the first defenses are as simple as "run" and "hide". Best regards to all!

At the risk of introducing "bizarre cultural mythologies and political polarizations" into this thread, let me quote an Old Master; "According as circumstances are favorable, one should modify one's plans." Sun Tzu Ping Fa I:17 http://www.chinapage.com/sunzi-e.html

I do not think it too outlandish to include his wisdom in our studies upon this path. As conflict of some sort is pretty much certain, but its exact nature still a mystery, he is a good resource as his concepts are timeless in their adaptability.

It’s not only money that will have to be relearned. It will be interesting to get back to the barter concept, after a lifetime of set prices. There are people who love to haggle (like at garage sales) and those who are grateful for the ability to privately check prices online, then go in to buy. To have to negotiate the price for everything will actually add a layer of complexity, methinks.

But I do think that’s a very good point about how dropping down to barter (or feudalism) was and could again be an improvement over a tertiary economy gone nuts. I have been feeling a lot of sanity just looking at the growing veggies in my garden, realizing it’s a direct relationship – grow food, eat food… no more hoping the boss likes what I’ve been slaving over in the cubicle.

And one of the best benefits of dropping out the tertiary economy is that people will be much more face-to-face with the actual value of food, materials, work – as they have to.. not exactly shift priorities, but become much more aware of them (instead of reaching for a cardboard box of food, for example, they will have to plan the garden to have at least a lot of the food they need). What I see is that we have been living in an almost “magic” culture – with cheap, instant goods at hand, many people have lost the sense of relative value – an IPOD is more “valuable” than a sack of rice…

I agree it’s gotten out of hand, but saving labor in one area allows one to stretch sometimes meager resources. Possibly they are not prissy, just exhausted! ;-)

you must actually enjoy getting hot and sweaty and sore and tired and truly productive in order to feel inside the deep satisfaction of being alive on some of your own terms.

Not true, actually, though I’m sure it adds to the satisfaction. I’ve always been adverse to sweating and dirty hands (I think it’s a tactile-sensitivity thing) but I still love to garden, and even though I hate feeling all those adjectives above, I feel a deep satisfaction when I’ve wrestled with weeds and won, or when the potato crop is successfully launched, for example.

I will tell you that once I get my new chicks settled in this “make it up as I go along” henhouse, I will feel a HUGE sense of satisfaction. The exhaustion has already happened! ;-)

As usual, a great read! I look forward to each new topic and the discussion.

JMG -- This may be a bit far afield for this comment thread; if so, enjoy it as a private note...

Just returned from PUF (Josh's memorial was one we could all hope for), where one of the workshop presenters had an interesting take on some of your writings. He noted your observations about the similarities between descriptions of extraterrestrials and faeries. From this HE concluded that YOU had concluded that faeries were in fact extraterrestrials. Actually, wasn't your conclusion rather the opposite, that "extraterrestrials" are just the latest version of a well-known, long-standing, earthly spiritual/psychological phenomenon?

I note this mostly as a close-to-home example of the way that people will take anything as support for their pre-existing ideas, even when it was intended as quite the opposite.

JMG--I started reading your blog back in February and enjoy it very much. Much to think about. You may have addressed this in the past. I don't recall seeing it mentioned since I started reading, and haven't seen anybody bring this issue up. Assuming that the scenarios you have talked about come about more or less as you have envisioned them, what should a person do as far as their IRA accounts, 401K accounts, etc.? I would assume your answer to be that one should go ahead and cash them out, pay the penalty fee, pay the income taxes, and use the remainder to pay off debt, start purchasing things that will have a useable and long-term service such as hand tools, whatever, etc. etc. Am I right on that, or what has/would be your suggestion? I'm assuming that under the present scenarios that are being worked out, financial accounts are not going to go anywhere but south in the long-term, and probably short-term as well. So, that being the case, there would be no sense in leaving retirement account money wasting away for a future that may never be. If the start of the unraveling was 20 years off, then it might be worth leaving it there, I am 52, but it seemingly looks like now is better than later?

Blending in and the appearance of poverty are excellent survival strategies indeed! Evolution tends to move us towards the average anyway. What do you think?

On a different note, I've always felt that there's something wrong with a society that says that it's OK to drive to a gym and then use a walking machine. I know someone who does this and it seems very odd to me. Apparently they don't want to be seen by other people walking, although you can justify most behaviours... Almost as useless an activity as leaf blowers...

A curious contradiction just occurred to me, after all these many discussions of complexity. In general, in biological systems complexity seems to promote stability -- this is true of organisms and ecosystems. Conversely, in political and financial systems, complexity seems to promote instability. What contributes to this difference? Is it the result of long-term selection acting on living systems to encourage stabilizing negative feedbacks, whereas relatively young (in evolutionary scales) human constructs are more likely to include destabilizing positive feedbacks?

I'm not sure whether or not you follow Jeff Vail, but he has a model for civilization after the collapse that closely resembles the land and labor focus of feudal Europe. He calls it rhizome, and proposes it as an alternative to heirarchy. In his ideal world, we live in modern day Tuscan hill towns, with relative self-sufficiency among small, groups of interconnected families. There are no fuedal lords in sight, which may be an over-optimistic view of human nature, but the concept is sound, and I think you would be very interested in his take on the issue: (http://www.jeffvail.net/2006/04/envisioning-hamlet-economy-topology-of.html)

Wordek, granted. I simply wanted to make a point -- one too often missed these days -- that there are aspects of value that aren't simply a matter of personal preference, except insofar as most people prefer not to starve to death.

Tom, welcome to the discussion! You're quite right that money functions as a store of value, though that function is breaking down tolerably often these days. One of the hard consequences of the process of decline and fall we're experiencing just now is that every store of value becomes problematic.

Edde, any object of value that can be picked up and carried off by a Visigoth is a dubious investment in the kind of historical periods that attract Visigoths -- which ours may well become. Skills are a better investment; if you know how to brew good beer, your local Visigoths will trade you all the titanium you want for it.

Hawlkeye, don't even get me started. My favorite definition of "yuppie logic" is the idea that it makes sense to buy a power lawnmower, and then drive to the gym to get the exercise you could have gotten pushing a push mower -- not to mention walking to the gym! (Yes, I use a push mower, too.) A slogan worth circulating: "Real sustainability makes you sweat."

Ariel, it's true! Doesn't always work, but it's the first line of defense.

Cathy, the simplest of all economies is the one in which you produce the goods and services you need by your own labor. That's the most sustainable and the most stable of all economies, too.

Dltrammel, thanks for the link!

Bill, that's funny. Yes, in fact, from my perspective, those "extraterrestrials" who haven't been invented by assorted air forces are a reflection of the same odd variety of human experience that another age labeled "fairies" and the like. That's hardly a new idea; either -- Jacques Vallee and John Keel were saying the same things when I was a kid. Still, it doesn't matter how often you say something, those who want to hear something else will hear what they want to hear.

David, in your place I'd cash 'em out, and use the proceeds to get yourself out of debt and get some solid training in useful practical skills -- those are more important and more durable than anything else you can buy.

Cherokee, I hope that one leaf blower survives the Long Descent and gets put in a museum, so that people a thousand years from now can look at it, shake their heads, and realize what a bunch of wasteful dorks we were.

Bill, good. I think the difference is that natural complexity evolved gradually over millions of years of ruthless Darwinian weeding; by the time we came around, pretty much all the rough edges were gone. We sauntered in and decided that we could make things work much better by following whatever arbitrary mental and cultural constructs wse thought were the laws of nature, and we've produced quite a number of flops -- though also some successes. Give us another ten million years or so, and we might have things a little better in hand.

Scott, I do follow Jeff's work. I have my doubts about his theory, as I do about any social or political theory -- as I see it, societies are natural phenomena; they evolve according to their own rules and in their own time, and trying to force them into a mold composed of concepts and theories is normally a recipe for disaster. Still, it's an interesting idea.

Scot,The problem with idyllized eco-paradisical futures is that not everybody will get on board. All it takes is one invading Sumerian/Assyrian/Hittite/Egyptian/Persian/Macedonian/Roman/Visigoth/Lombard/Hun/Saracen/British/American army to destroy the carefully-built and balanced utopia.

In fact, I can't think of a peaceful agrarian society that was left to go for even a couple of decades without being invaded, dissolving into civil war or descending into arbitrary tyrranny, unless protected by either force of arms or long distance from rivals.

I tend to agree with you that 'Nature' is slowly being eroded by human activity. However, I am not so sure Peak Oil is going to be such a defining event - I am much more worried about topsoil depletion and global warming, for instance, than about Peak Oil (this may be due to the fact the I live in Europe, which is not as dependent on cars as the United States).

But this not the reason for this post. I read, a little while ago, "Bad Money" by Kevin Phillips - quite an interesting author in his own right - and a small part of that book made a strong impression on me: the fact that all Empires end up in a disastrous financial crisis, usually brought about by the crushing costs of maintaining military might.

He also mentions that most empires are fairly dependent on a given energy source: the Dutch used wind power, the British used coal, the Americans, Oil.

My question for you would therefore be: are you sure the current crisis is not simply due to the end of the American Empire, and to the cost of 'pax americana' as we have known it for the past 50 years? Perhaps, if the USA had turned away from what I call 'the Empire temptation' in the 50s, we would not be having this conversation? (Remember Eisenhower's 'militaro-industrial complex' - a clear warning if there ever was one?)

Another question would also be: why paint such a rosy picture of the feudal times? After all, there is a reason why these are known as 'The Dark Ages'. They were mostly a period of unrelenting misery and oppression for the vast majority of Europeans (think witch hunting and crusades here)... And isn't it interesting that they also saw the Golden Age of the Moslem world, with civilizations as brilliant as Baghdad and Southern Spain, that were tolerant and open? (within, of course, the religious parameters of the time).

Not to mention the Chinese civilization, with its own brilliant intellectual and philosophical pursuits, that was so stunning in its successes. You could perhaps say that the wheel has come around, and that, if China is the next world Empire, it may well be it will also be based on a new form of energy (Solar, perhaps?).

One final question that comes to mind is this: may your 'religion' color your perception of this specific period in European history?

(As an aside - and I hope you won't be offended by this - I find it deeply ironic, as a European, to see something as essentially 'Celtic' as the druidic religion promoted in North America... What made you decide to follow this faith and its tenets)

It seems to me - based on your writings - that you value community over, for instance, economic growth. While this point may be debatable (is sustainable economic growth even possible?) are you sure you are not 'projecting' your own desires onto the blank canvas of the future? The future being, by definition, unpredictable, it seems to me that any attempt at defining it ends up in abject failure ('Down Jones 36,000'...?).

And, finally, as Kevin Phillips mentioned in his book, the end of empire is usually accompanied by extreme religiosity, demands for patriotic behaviour and repression of dissent, and very vocal pessimisim: all these traits can be seen in modern-day America. Ergo, are you sure your predictions, while always interesting and thought-provoking, are not colored by the currently unfolding events?

While economics has never been my strong point, I wish to comment on what seems to me to be your central idea- that feudal systems of government are more economically viable than our industrial systems.

While the simplistic exchange of work for land may be a step forward economically, what of the cost to human freedom? Under any feudal system, for example, the rights of women disappear as they are forced back into the home to support the system by providing children and child care. The abuse of serfs is famous worldwide, Russian, medieval, Japanese, were all treated as property by their overlords.

How would you go about combining the economic values of such a system with the liberties (especially for women) of today's society?

That's an interesting question you have come across: "A curious contradiction just occurred to me, after all these many discussions of complexity. In general, in biological systems complexity seems to promote stability -- this is true of organisms and ecosystems. Conversely, in political and financial systems, complexity seems to promote instability." I have wondered about that myself.

I think that the answer lies in the different ways biological and human systems use complexity to gain or limit redundancy. Nature makes countless copies of organisms in countless numbers of species to exploit some incredibly small niches. This redundancy helps ensure that individual species, and life itself will survive.

Humans on the other hand, try to use complexity to eliminate redundancy wherever possible. For example, we might consolidate a large number of automobile builders and call it General Motors. Or we might hand over selected family or tribal functions to a government. These apparent simplifications, of course, require more complex communications, transportation, financial, and other systems.

At the end of the day, the natural systems are just as interconnected as human systems, if not more so. But the redundancy ensures that nature can take changes and small shocks in stride. On the other hand, the human systems are built like engines; one tiny part fails and the whole thing stops.

Danby, Jeff Vail isn't talking about a pacifist utopia -- he's one of the main theorists of fourth generation warfare, and as I understand it, his rhizome system would involve defense arrangements not unlike those that have worked very well in Switzerland for some centuries.

Gil, I take it you haven't been reading this blog for long. To begin with, I've been talking about the decline and fall of the American empire for a couple of years now. Of course that's a massive factor in the current political and economic situation, but it's taking place against the broader and even more massive background of the end of the age of cheap energy.

I gather from your comments about the Middle Ages that you haven't researched the subject; the witch burnings, for example, didn't start until the 1370s, which by most standards is on the brink of the Renaissance, and reached their peak in the 1500s and 1600s, when the medieval system was in its grave. As for my faith, well, there again you might want to do a bit more reading; the modern Druid movement was partly inspired by the ancient Celtic Druids (who went extinct long before the Middle Ages, by the way), but it's a modern religious movement that emerged in the 18th and 19th centuries in response to the Industrial Revolution, and it has no particular attachment to the Middle Ages.

Finally, it's always easy to insist that somebody's predictions of the future must be a reflection of some factor other than a reasoned assessment of the future. So? Your discomfort with my predictions can be explained away by exactly the same argument. I calls 'em as I sees 'em, and so far, at least, my predictions of the near future have come much closer to what's happened than either the business-as-usual model or the we're-all-gonna-die model.

Caboodle, of course feudalism offends against modern ideas of justice and equality. When I say that it works, I don't mean to say that it's any kind of improvement on the status quo; I mean simply that it works when more centralized systems break down, and provide a rough but functional degree of security and stability. Every human social system includes a great deal of oppression and injustice, ours as much as others; we don't see the human cost of industrial society because we've offshored most of that cost to other countries. One drawback of the future ahead of us is that a lot of that is going to be shipped back home.

Ariel, look closely at the chives and the grass. Chives are little tubes with pointed ends; they don't have narrow flat blades, the way grass does. Once you get used to the difference, you won't have to worry about pulling them out as weeds!

Hi BillHope you and yours are well and recovering okay from the floods and other weather havoc you have experienced recently.

“ that "extraterrestrials" are just the latest version of a well-known, long-standing, earthly spiritual/psychological phenomenon? “

I do recall reading that the experience of a phenomena known as sleep paralysis has given rise to various legends throughout different cultures including instances in modern times of “alien abduction”Though my favourite weird sleep condition would have to be “exploding head syndrome”. How do I get me some of those fun times?

Just tying in to that and an earlier comment about sensory deprivation, I remember once when I was abut 12 walking home from the neighbours house at night. It was literally “cant see your hand” pitch black and I was navigating by memory with one hand brushing against the bank at the side of the road. All of a sudden there was a presence right behind me emanating an incredibly intense malevolence. All the hair I had ( not much at that age) was on end and if you ever read about terror running up and down the spine well I had it bad. I turned to look and I could see a human shape – even though I couldnt see anything else there was a shape right there except it wasnt where I looked, it was always just not quite where my eyes were pointing no matter how I tried to look at it ( does that make sense? – guess it will have to ) I couldnt run since I would have just fallen face first in the rocks and gravel so I just kept walking with that evil hating leering thing just behind me, telling myself over and over it doesnt exist, its all in my mind. At one point it got so close that I just spun and swung my arm through it... ….nothing there. And it followed me until I was close enough to the house for the lights to impact the darkness. So, imagination? Yes. Terrifying? YES!!. Real?... Depends on how you define real I guess. It certainly gave me a greater appreciation of how the stories of wirry-cows, demons, goblins, malevolent aliens etc could came to be so prevalent in ancient and modern folklore.

Hi Cherokee

“Blending in and the appearance of poverty are excellent survival strategies indeed! Evolution tends to move us towards the average anyway. What do you think?”

My feeling is yes, although personally that doesnt work too well for me. Im just too big, ugly and loud to carry it off all that well. I have noticed that whenever anything resembling a “revolution” comes around I seem to be one of the first up against the proverbial “wall”. Therefore my own favourite strategies run more along the lines of “prepare an escape route” and “keep em guessing”. (Oh Evolution: Why hast thou forsaken me?)

Hi NebrisSpeaking of bizarre cultural mythologies and political polarizationsWhat would sun-tzu have done here I wonder?http://en.wikipedia.org/wiki/Pai_Marirehttp://en.wikipedia.org/wiki/Volkner_incident

Gil -- several points. [I've deleted the parts that JMG addressed already while I was composing this]. First, you seem to think the "oil" issue is mostly about cars. That is an exceedingly tunnel-vision perspective. Petroleum fuels the global transportation network, without which Europe would soon starve to death. It also fuels the global agricultural industry, without which Europe would soon starve to death. If you think you are less subject to the shocks from petroleum shortages, think again. I agree, by the way, that topsoil depletion is also a major global problem -- the effects of which we are at present largely masking with petroleum-dependent fertilizers and industrial agriculture.

Second, sort out your medieval history 101, lecture number 2. The "Dark Ages" were the period following the collapse of the Roman Empire and before the rise of large powerful Feudal principalities. They are called that, I believe, because there is so little information recorded about them. The archeological evidence of the "Dark Ages" suggests they were a time of small-scale social organization and localized agriculture in the wake of the collapse of most long-distance trade. It is also in this time that the isolation between regions caused Latin to evolve and diversify into all its descendent tongues. The lives of the peasants in outlying areas (i.e. most of Europe) might not have been a whole lot better or worse than under Roman rule. Archaeologists have found that in fact quite a lot of cultural and technological development took place during this era; the term "Dark Ages" is now considered a biased and elitist term applied by those who considered Roman society to be the epitome of human achievement. It's an unpopular aspect of European history that the lives of the ordinary people seems to have mostly plodded along down pretty much the same lines, with occasional episodes of war and pillaging, right through all the major cultural transitions and power shifts that historians make their careers out of studying. The Basques raised sheep, the English raised barley, they built their houses and worked their farms in similar ways, century after century.

Overall you seem to be falling in to the common European trap of blaming it on America and believing that Europe is somehow not directly involved in the global petroleum economy and its corresponding military industrial complex. You may get to find out the truth about this in coming decades after we finish bankrupting ourselves and Europe has to get by on its own. European history suggests this will NOT be a time of peace or prosperity!

And finally, you seem to forget, as do most euro-Americans, that for the majority of present-day Americans, if you go back more than a few hundred years our history IS european history. There are more people of "celtic" (another term that archaeologists have abandoned) ancestry here than there are in the UK.

Dear John, Thank you for the gardening lesson, and the encouragement. Pulling weeds is humbling, but has been instructive.You too. And for *Danby* regarding the destruction of utopia in the last days: the prophet Isaiah speaks of a power manifested as a cloud and smoke by day and a pillar of fire by night, the glory of God, which protects His "utopia" of Zion from its opposition.

Interesting point about nature and complexity. I must say I see the cause and effect reversed: it's a stable environment that begets complexity, not the other way around. In other words, if the environment remains fixed eventually specialized creatures will evolve to fit all its niches; if the environment is in flux, many of these specialized creatures will go extinct and the generalists (cockroaches, rats, humans) will survive. However, your contrast to human institutions still stands: it's change that leads to human complexity, not stability. Perhaps this is why it's unstable, as the increased complexity is itself a change that leads to increased complexity!

I finally found the right metaphor: most of America is handling peak oil (and other things)just like that dang hubby who drives around with his gas gauge at "E" saying, "I've got lots more gas left; I can drive days more without needing to fill it." and you just know he's gonna run out in some far out back road. LOL!

Thanks Hawlkeye for your thoughts on the love of "sweat equity". It is true, for me and my wife at least, that time spent digging in the dirt is a valuable tool for self renewal and contemplation. With the obvious benefit of food and beauty gained. There will always be the "grasshoppers" who cavort while the "ants" struggle, and the trick is to keep the "grasshoppers" from controlling the process. Drudgery is what pushes humans towards "labor saving devices", yet sometimes there is no way out of drudgery. Watch anyone filing papers, running a press, driving a bus, or even weeding. It all depends on where you put your mind as you work.

Wanted to know what reference sources you used for the following:1)the 350 year number you gave for start of the Industrial Age. This would put the start at 1698 for the Savery Engine.2) Information regarding the Mayans3) Current wheat production in the middle east.

Chris Hedges referred to a book called "A Short Story of Progress" by Ronald Wright. Have you heard of it? Very short (128 pages) and easy to read and full of wide array of information regarding many of the topics you've written about. I especially enjoyed his tracing biblical stories back to real world environmental situations in the Middle East.

Ariel55True, but His kingdom is not of this world, as this world in it's present darkness is ruled by the deceiver. And we do not know when the last days are. Not even the Son of Man knows when they are to come, but only the Father in heaven.

So depending on the idea that 3000 year old prophecies apply specifically and literally to you, and on God intervening to save your family and society is at best unreliable and at worst disastrous. His interventions are rare enough by any measure that while one should hope for them, one should muddle through as best one can until His help arrives. Your best effort won't stymie Him and your understanding of his intention may well be incorrect.

Sorry if this comes across a harsh. It's not intended to be. But I have been hearing about the arrival of the end times for 40 years, without seeing any actual indication that they are here.

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About JMG

John Michael Greer is the Grand Archdruid of the Ancient Order of Druids in America and the author of more than thirty books on a wide range of subjects, including peak oil and the future of industrial society. He lives in Cumberland, MD, an old red brick mill town in the north central Appalachians, with his wife Sara.

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